Glassnode News: According to new data from blockchain analytics firm Glassnode, institutional demand for BTC has been slowing lately after rising demand for Bitcoin’s phenomenal rise.
Institutional investors (large well-known organizations) have lost interest in BTC, the largest cryptocurrency by market capitalization, the firm said in a report released today. The report said that this can be proven by looking at the Grayscale Bitcoin Trust (GBTC).
Glassnode said that GBTC, a popular investment product that allows investors to trade shares with large Bitcoin pools, is constantly trading at a discount to its net asset value (NAV). Grayscale’s shares in the Bitcoin Trust are now more affordable to buy Bitcoin. This was not the case until recently; For years, investors paid a premium to buy GBTC.
The report includes the following statements:
“The primary driver of Bitcoin price growth in 2020 and 2021 was institutional demand. One of the biggest factors in this was the one-way flow of money into Grayscale’s GBTC trust fund as investors sought to reinforce the high premium observed in 2020 and early 2021.”
The report added that the combined amount of Bitcoin fell on two popular exchanges, Purpose and 3iQ. Currently, the combined net flows for both ETFs over the past month show a total of 8,037 BTC flowing from the products.
The report stated that 3iQ’s assets fell to 10,483 BTC (over $381 million at today’s prices).
“There is no slowdown,” 3iQ CEO Fred Pye said, noting that his company has met hundreds of potential customers in the past two weeks alone.
“The request we received is still real and important.” he continued. According to Pye, the exit was the cash outflow of investors who had already made a profit.
3iQ Exchange Traded Fund (ETF) is North America’s only crypto mutual fund. While the US awaits a crypto ETF, Canada has already approved a few. 3iQ, Canada’s first crypto ETF, was launched on the Toronto Stock Exchange last April.
Glassnode added that the balance of cryptocurrencies on Coinbase, the largest crypto exchange in the US, remained stagnant. Previously, the San Francisco-based exchange was boosting Bitcoin as it was the preferred way for institutions to buy cryptocurrencies. However, the balance has remained stable since December.
“Observations of the GBTC premium, net outflows from the combined Purpose and QBTC ETFs, and a sluggish Coinbase balance continue, while institutional demand appears somewhat sluggish,” the report said.